Martin Wheatley, chief executive-designate of the UK's Financial Conduct Authority, today published the findings of its review into Libor and identified 10 key reforms needed to restore trust in the benchmark rate in the wake of the scandal over the rigging of submissions.

Wheatley's recommendations for comprehensive reform of Libor span procedural and regulatory aspects of the benchmark rate, and will be examined by the UK Government, which will respond once Parliament returns from recess, the UK Treasury said today in a statement accompanying the report.

The report's main recommendations follow below:

Regulation of Libor
1) The authorities should introduce statutory regulation of administration of, and submission to, Libor, including an Approved Persons regime, to provide the assurance of credible independent supervision, oversight and enforcement, both civil and criminal.

Institutional reform
2) The BBA should transfer responsibility for Libor to a new administrator, who will be responsible for compiling and distributing the rate, as well as providing credible internal governance and oversight. This should be achieved through a tender process to be run by an independent committee convened by the regulatory authorities.

3) The new administrator should fulfil specific obligations as part of its governance and oversight of the rate, having due regard to transparency and fair and nondiscriminatory access to the benchmark. These obligations will include surveillance and scrutiny of submissions, publication of a statistical digest of rate submissions, and periodic reviews addressing the issue of whether Libor continues to meet market needs effectively and credibly.

The rules governing Libor
4) Submitting banks should immediately look to comply with the submission guidelines presented in this report, making explicit and clear use of transaction data to corroborate their submissions.

5) The new administrator should, as a priority, introduce a code of conduct for submitters that should clearly define:
• guidelines for the explicit use of transaction data to determine submissions;
• systems and controls for submitting firms;
• transaction record keeping responsibilities for submitting banks; and
• a requirement for regular external audit of submitting firms.

Immediate improvements to Libor
6) The BBA and should cease the compilation and publication of Libor for those currencies and tenors for which there is insufficient trade data to corroborate submissions, immediately engaging in consultation with users and submitters to plan and implement a phased removal of these rates.

7) The BBA should publish individual Libor submissions after 3 months to reduce the potential for submitters to attempt manipulation, and to reduce any potential interpretation of submissions as a signal of creditworthiness.

8) Banks, including those not currently submitting to Libor , should be encouraged to participate as widely as possible in the Libor compilation process, including, if necessary, through new powers of regulatory compulsion.

9) Market participants using Libor should be encouraged to consider and evaluate their use of Libor , including the a consideration of whether Libor is the most appropriate benchmark for the transactions that they undertake, and whether standard contracts contain adequate contingency provisions covering the event of Libor not being produced.

International co-ordination
10) The UK authorities should work closely with the European and international community and contribute fully to the debate on the long-term future of Libor and other global benchmarks, establishing and promoting clear principles for effective global benchmarks.